Judge Throws Out $35 Million Lawsuit Against Brookdale

By Tim Regan | June 27, 2017

The nation’s largest senior living provider and one of the biggest home health care providers, Brookdale Senior Living (NYSE: BKD), is off the hook in a $35 million lawsuit, a federal judge rule on June 22.

The dismissal marks the end of a whistleblower case brought by former Brookdale employee Marjorie Prather, who was originally hired to review documentation related to home health careclients.

In a 2012 lawsuit, Prather accused the company of approximately $35 million in Medicare fraud related to home health payments. Though that case was dismissedin 2015 due to lack of evidence, the Sixth Circuit Court of Appealsreversedthat dismissal and revived the case last October.

Prather alleged that Brookdale violated the False Claims Act by billing Medicare for home health services without obtaining required face-to-face documentation or signatures on certifications at the time the doctor established patients’ care plans.

Brookdale senior executives also pressured Prather and other employees to expedite the billing process, and instructed them to ignore compliance issues that slowed things down, the lawsuit said. Additionally, Brookdale paid doctors for time they spent signing and reviewing documents, Prather claimed.

The provider did all this to help clear a backlog of 7,000 Medicare claims worth approximately $35 million and to avoid a “looming financial crisis,” according to the suit.

But Brookdale defended itself last March by pointing out it had only ever obtained doctor signatures late, as opposed to not at all. If the case truly involved “missing signatures,” it would be much stronger for Prather, the company said at the time.

As long as Brookdale obtained doctors’ signatures before submitting final claims for payment, the timeliness of those signatures does not render the claims false under the False Claims Act, Brookdale argued.

Ultimately, U.S. District Judge Aleta A. Trauger ruled in Brookdale’s favor, ruling that billing Medicare before obtaining a physician’s signature is not fraudulent because Brookdale is “not material to [the government’s] payment decision.”